Job Half Done
The Budget focuses on growth to create jobs but lacks holistic measures to solve the problem of massive unemployment

- Feb 5, 2021,
- Updated Feb 6, 2021 3:20 PM IST
India's biggest advantage, its demographic dividend -- where its working age population is more than its dependent population -- can become its biggest nightmare without sufficient employment avenues. The year 2020 will be known for business shutdowns, layoffs and joblessness due to the pandemic. In December 2020, according to the Centre for Monitoring Indian Economy, India's unemployment rate was as high as 9.1 per cent. Many expected Union Budget 2021 to take note of this and create ample growth and employment opportunities. The government has tried to do that by increasing spending. An increase in fiscal deficit to 9.5 per cent of gross domestic product (RE FY21) and 6.8 per cent in FY22 shows intention to increase spending and push growth, which will, in turn, create jobs. There is also a 34.5 per cent increase in allocation for roads and railways to Rs 5.54 lakh crore. This comes on top of 137 per cent increase in investment in health and wellbeing to Rs 2.23 lakh crore. Both sectors are major employers.
Attempts to revive the banking sector also augur well for credit growth and, by extension, job creation. "Recapitalisation of PSBs and introduction of an asset reconstruction company (bad bank) are welcome initiatives because they will inject greater liquidity in the market, leading to job creation. Also, the increase in number of metro trains and city buses will give a push to manufacturing sector as well as EPC companies, creating jobs," says Aditya Narayan Mishra, CEO of staffing firm CIEL HR Services.
The Budget also proposes increase in FDI in the insurance sector from 49 per cent to 74 per cent. Insurance is a big employer. "The government has also thrown a challenge to the private sector to spend and expand their factories and enterprises, which will proliferate employment generation," says Lohit Bhatia, President, Indian Staffing Federation.
India's biggest advantage, its demographic dividend -- where its working age population is more than its dependent population -- can become its biggest nightmare without sufficient employment avenues. The year 2020 will be known for business shutdowns, layoffs and joblessness due to the pandemic. In December 2020, according to the Centre for Monitoring Indian Economy, India's unemployment rate was as high as 9.1 per cent. Many expected Union Budget 2021 to take note of this and create ample growth and employment opportunities. The government has tried to do that by increasing spending. An increase in fiscal deficit to 9.5 per cent of gross domestic product (RE FY21) and 6.8 per cent in FY22 shows intention to increase spending and push growth, which will, in turn, create jobs. There is also a 34.5 per cent increase in allocation for roads and railways to Rs 5.54 lakh crore. This comes on top of 137 per cent increase in investment in health and wellbeing to Rs 2.23 lakh crore. Both sectors are major employers.
Attempts to revive the banking sector also augur well for credit growth and, by extension, job creation. "Recapitalisation of PSBs and introduction of an asset reconstruction company (bad bank) are welcome initiatives because they will inject greater liquidity in the market, leading to job creation. Also, the increase in number of metro trains and city buses will give a push to manufacturing sector as well as EPC companies, creating jobs," says Aditya Narayan Mishra, CEO of staffing firm CIEL HR Services.
The Budget also proposes increase in FDI in the insurance sector from 49 per cent to 74 per cent. Insurance is a big employer. "The government has also thrown a challenge to the private sector to spend and expand their factories and enterprises, which will proliferate employment generation," says Lohit Bhatia, President, Indian Staffing Federation.